New Brunswick conservationists are demanding to know why a Fredericton businessman was apparently given permission to develop a property that includes a wetland.

The wetlands are part of a 2.4-hectare patch of land owned by RAR Properties Inc. off Bishop Drive near the Regent Mall.

Al Lacey, a former Liberal cabinet minister in Frank McKenna's government and co-owner of RAR Properties, said the company has reached a compromise with the government that is allowing 1.8 hectares of the land to be filled as long as about 0.8 hectares are left untouched.

In 2004, New Brunswick's Environment Department said the company was not allowed to fill in the land, which is adjacent to an area known as the Regent Street bog. Companies are not allowed to do fill-in work or development within 30 metres of a wetland without a permit issued by the environment minister.

But RAR Properties began its work anyway and was given a cease-and-desist order in 2005. The company was still working inside the buffer zone in 2006 and was fined $1,000 by a judge in 2008 after pleading guilty to violating the Clean Water Act.

Lacey told CBC News when he bought the property there was no wetland in the area but other developments have now pushed water onto his land.

"I'm really disappointed that this has been allowed to go ahead," said Megan de Graaf, watershed project co-ordinator with the Conservation Council of New Brunswick.

The Environment Department declined to comment on if a permit has been issued to RAR Properties or explain why the work is now allowed to proceed. A spokesperson for the department said it will not be commenting because of ongoing enforcement action related to the piece of land.

Conservative Leader Jeannot Volpé said he'd also like some explanation on why the work is being allowed to proceed.

"I haven't seen any change in rules so for them now to change the decision, I would like to know from staff from environment why they say they have changed," Volpé said.